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New software programs offer accessibility, speed and a wealth of data.

With the crunch of April 15 filings letting up (until next year), now is the time to review a few products designed to make the work a lot easier.

CD-ROM research libraries

One notable development is the proliferation of CD-ROM (Compact Disc Read Only Memory) as a tax library and research tool. This technology is now being used by a number of tax publishers, including West Publishing Company, Matthew Bender, Commerce Clearing House and Research Institute of America (RIA).

RIA's service is particularly impressive and attractively priced. For an amount equal to the cost of their printed tax service, RIA sells a single compact disc that includes the Internal Revenue Code and regulations together with their Tax Coordinator Service, Federal Tax Manual and Weekly Alert. By the end of the year, RIA expects to have both the official IRS publications and current revenue rulings on disc and anticipates adding the cumulative bulletins and tax cases by early next year. Private letter rulings, technical advice memoranda and general counsel memoranda should follow, as well. Since RIA is affiliated with Maxwell Macmillan (Prentice-Hall (P-H)) Information Services and Warren, Gorham & Lamont, it is only a matter of time before it will include P-H Federal and State Tax Services and selected treatises, too. This should revolutionize tax research.

Many experienced tax practitioners already use key-word search techniques in their research through electronic on-line services such as Lexis or WestLaw, but the cost of these services and the unpredictability of billings has limited their appeal. Now, the practitioner can employ key-word search techniques, heretofore available only on the more expensive services, through CD-ROM. By simply typing in key-word combinations (such as "reasonable compensation"), the computer will allow the practitioner to browse through every segment of the service where those words are used in combination or proximity. The CD-ROM products also allow quick access from a cited authority to the relevant explanation.

RIA's search software (Folio PreVIEWS) operates very rapidly and is becoming the de facto standard in tax and accounting libraries (it has already been adopted by the AICPA and FASB). The ability to search through private letter rulings and other administrative documents will open up a whole new world of research since these materials are most difficult to access as printed records. Thus, the practitioner can browse through an enormous number of documents and focus on those relevant to his problem at a relatively modest cost.

Fiduciary tax and accounting systems

Anyone involved with estates and trusts will be pleased by the "systems" approach taken by several fiduciary accounting packages. Essentially, these packages use a database approach that allows the user to generate estate and gift tax returns, fiduciary income tax returns and court-approved forms of fiduciary accounting from the same data, much like a "one-write" accounting system. Two popular programs are Shepard's/McGraw Hill's "Fiduciary Accounting for Trusts and Estates" and the "6-in-1 Estate Administration System" created by The Lackner Computer Group.

Both of these programs are well worth their cost simply as tax preparation packages. However, their main advantage lies in their ability to generate additional accounting reports and information schedules. For example, they can be used to maintain an inventory of securities that automatically updates stock prices from services such as Dow Jones or CompuServe.

Both Shepard's "FATE" and Lackner's "6-in-1" are authored by lawyers and certified data processors. The "6-in-1" system was developed by Vincent Lackner while he was working as a lawyer to assist him in the administration of trusts and estates. He used two outstanding products already popular with the accounting and legal professions--Lotus 1-2-3 and Q & A (a flat file database)--thereby allowing the user to customize his own reports. Anyone familiar with the repeated changes and computations associated with the preparation of an estate tax return will appreciate the facility with which changes can be made through these programs.

CPA tickler database

Now that practitioners have to update estimated tax payments each quarter and can no longer rely on last year's tax as a safe harbor, it is even more important to ensure that tax forms are timely prepared and mailed for all clients. The fifteenth of every month should not cause anxiety for fear that an estimated payment has been forgotten or that an extension request did not get mailed. The CPA Tickler Database by Front Row Systems is a straightforward and easy-to-use program that helps manage this task. It, too, uses a highly acclaimed relational database program (Paradox) to track client due dates and is being used by over 1,200 CPA firms.

The system allows the user to enter his client list or convert an existing client list from Lotus 1-2-3, ASCII or dBase formats. There are fields for basic client name and address information, plus additional identifiers such as taxpayer identifying numbers, client group, partners, managers and staff, and room for client notes, information such as who referred the client, notes regarding conversations and telephone numbers. There also is an event file in which a list of standard events is defined so that the system will prompt the user to know that a Form 1120 will have an extension date six months later based on the client's fiscal year.

Each client may have an unlimited number of events, and up to five firm members (partner, manager, staff, preparer and reviewer) can be associated with each event. Each event can be associated with up to six dates such as due date, promise date, completion date, start date, date preparation complete and date review complete. Additional fields include description, comment, hours, rate, fee and a recurring code. The promise date is particularly useful in setting goals and ensuring the work gets to the client on a timely basis.

Data entry is performed in one of five different data entry forms. A "multi-table" approach displaying client and tickler data simultaneously on one screen can be used or, by toggling between the two, data can be maintained in either file. Adding a new event is simplified: by typing the event code, the due date, description, recurring code, partner, manager and staff are automatically filled in. A tax return can be extended by a single keystroke. Setup is usually done by copying events from client to client rather than by data entry. A client's data can be replicated for up to 20 additional clients at a time through the copy client feature.

When reports are printed or when events are viewed on the screen, the practitioner may select items based on virtually any characteristic. Using Paradox's Query-by-Example, the system allows the user to enter an example of what he wants to see. Entering "< = 6/30/92" in the due date field selects all events due on or before June 30; entering "Smith" in the partner field selects just the events for partner Smith. The system selection is very intuitive, allowing a choice of virtually any combination of circumstances.

There are over 40 different system reports. These include due date reports, client reports, mailing labels, index and Rolodex cards, and even firm management and statistical reports. There is also a very basic report writer to sort and place fields in any order.

The system also allows for the input of up to 99 letters to clients. These letters may be either plain form letters or may contain data from the tickler file. Letters are then printed using the same selection criteria as all other reports to write only certain individual or corporate clients, to list upcoming events in the body of the letter and to remind clients of forthcoming estimated tax payments and suggest appropriate payment amounts.

Front Row Systems also has developed a software product, Tax Authority, to assist companies obliged to file in multiple jurisdictions. It has become common for corporations to file hundreds of state income tax returns, as well as thousands of sales tax returns, annual reports, business licenses and other filings. The software includes state taxing authority addresses and deadlines for corporate income tax, sales tax and annual reports. Users may establish additional federal, foreign, state and local authorities and events.

The system includes a wide range of office automation features including mailing labels, cover letters and due date reports. The user may enter payment amounts and use the system to match liabilities against year-to-date payments.

For further information on these software products, contact the following companies.

Front Row Systems

(800) 950-1120

The Lackner Computer Group

(412) 279-2121

Shepard's/McGraw Hill

(800) 368-1315

Editor's note: Mr. Wasserman is a member of the AICPA Tax Division's Tax Computer Applications Committee.
COPYRIGHT 1992 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Wasserman, William E.
Publication:The Tax Adviser
Article Type:Product/Service Evaluation
Date:Apr 1, 1992
Previous Article:Reconsolidation of subsidiary corporations; waiver of the 60-month waiting period.
Next Article:Highlights of the new taxpayer accuracy-related penalty rules.

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